Why appoint a liquidator voluntarily?

If your company is insolvent (i.e. unable to pay its debts as and when they fall due) you as a company director should take active steps to have it placed into liquidation as an orderly winding up can occur. In these circumstances you have two (2) choices:

  1. The most proactive approach would be for the directors and shareholders to appoint a liquidator. This is known as a Creditors Voluntary Liquidation What is a Creditors Voluntary Liquidation? If you chose this method, you can appoint a Registered Liquidator of your choosing.
  2. The other method for a company to be placed into liquidation is by a Court Order. The court may make the order based on an application by the Company, (ie a director, a shareholder) or a creditor. If you allow a creditor to make the application to court (usually after a Statutory Demand What is a Statutory Demand? has expired), the creditor will in most cases select the Official Liquidator of their choosing (in other words you won’t have any control over the process)

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